Sound management of risks related to money laundering and financing of terrorism
These guidelines describe how banks should include risks related to money laundering and financing of terrorism within their overall risk management framework. Prudent management of these risks, together with effective supervisory oversight, is critical in protecting the safety and soundness of banks as well as the integrity of the financial system. Failure to manage these risks can expose banks to serious reputational, operational, compliance and other risks.
The guidelines notably assist banks in defining their approach to account opening, including developing an effective customer identification and verification programme, and in applying the risk-based approach for correspondent banking relationships. These are consistent with the Financial Action Task Force (FATF) guidance on Correspondent banking services issued in October 2016 and serve the same objective of clarifying rules applicable to banks conducting correspondent banking activities. They form part of a broader initiative of the international community to assess and address the decline in correspondent banking coordinated by the Financial Stability Board.